Richard Scrushy to be released to home confinement in December 2012

Richard Scrushy, shown before a court appearance in 2007, could be released from federal prison in December 2012. (The Associated Press / Dave Martin)

Former HealthSouth Corp. Chief Executive Richard Scrushy is slated to be released from federal prison in December 2012, about seven months ahead of schedule, and is applying to be released even sooner.

Documents filed by Scrushy's attorneys this month say officials at the Beaumont Federal Correctional Complex in Texas have recommended that he be released to "home confinement" on Dec. 10, 2012. The documents also state Scrushy's security-risk classification within the federal prison system is the lowest available.

Scrushy had been scheduled to be released June 8, 2013, after serving the full sentence he was given in June 2007 in Montgomery federal court for bribing former Alabama Gov. Don Siegelman for a spot on the state's hospital permitting board.

Now, Scrushy is asking the federal court system to release him even earlier than December 2012. In court documents, he cited time served, that co-defendant Siegelman has already been released and the improbability he would flee pending a review of the men's bribery sentences.

"Richard Scrushy would have everything to lose -- most especially his secure family situation and his contact with his loved ones -- if he did not honor the conditions of release," the Scrushy filing from last week says. "All he is asking for is an opportunity to be released on bond with conditions, so that he can spend his first holiday season in four years with his wife and children."

"Home confinement" for Scrushy, who once ran Alabama's largest publicly traded company, would appear to be in a suburb of Houston, according to court filings. That's where his wife and children settled in 2009 after the family's $5 million Vestavia Hills estate was seized by HealthSouth shareholders who hold a $2.8 billion civil judgment against Scrushy. He was found liable during a 2009 Jefferson County civil trial for the accounting fraud that almost sank the company.

In their own filing last week, federal prosecutors have opposed Scrushy's most recent attempt to gain early release, citing their arguments to his earlier attempt in July. Then, prosecutors said Scrushy hadn't proved he wasn't a flight risk, and that the resentencing he had applied for would be unlikely to reduce his original 82-month sentence.

Scrushy applied for resentencing in May after the Eleventh U.S. Circuit Court of Appeals overturned two of the bribery counts against him.

In earlier court documents seeking early release, Scrushy pleaded poverty, saying he lacked "the means to flee" even if he wanted to. Once worth about $300 million, according to federal auditors, Scrushy has had his fortune decimated by legal fees, civil judgments in favor of shareholders, and court orders he return improperly paid bonuses and refund proceeds on sales of HealthSouth shares.

In 2009, Scrushy was dubbed "the CEO of the fraud" at Birmingham-based HealthSouth, which once operated 2,000 physical therapy clinics nationwide. Shareholder attorneys presented evidence in Jefferson County Circuit Court that Scrushy ordered subordinates to fake revenue and profits to pump up shares and trigger executive bonuses.

From 1996 through 2002, it was shown, HealthSouth reported $1.3 billion in fake profits, while the company incurred actual losses of $2.4 billion.

The company has since reformatted and severed all ties to Scrushy, who was acquitted of the fraud during a 2005 federal criminal trial in Birmingham.